Delays in refund have been partly caused by lodging of inaccurate claims by taxpayers (wrong declarations), according to KRA Commissioner for Domestic Taxes Department Elizabeth Meyo.

Lack of proper documentation has forced KRA to heighten scrutiny on claims to avoid wrong payments and curb possible fraud.

“Currently, claims amounting to Sh1 billion cannot be processed because the refund claimants are yet to provide required documents,” the commissioner's office told the Star recently.

Other causes for delayed VAT refunds, according to KRA, is a high risk of cargo diversion.

The taxman has called for accountability by other agencies, noting the need for rigorous verification so that no case is perceived to be refunded when having debt or without export, verification owing to risks of export diversion.

The process is hurt by the need for debt validation and export verification and the inclusion of other time-consuming activities that are not part of the refund process.

Times Tower has also lamented low funding from Treasury. Currently, the National Treasury allocates Sh1.2 billion to pay VAT claims per month while the monthly claims average Sh2.5 billion. This, KRA says, creates a deficit that leads to the backlog.

“To address the challenge, KRA has requested additional funding from the National Treasury,” the authority said in response to inquiries by the Star.

KRA has put in place appropriate measures including implementation of the green channel framework to fast track processing of low-risk claims and establishment of a full-time project team to process the backlog claims in the next three months, it said.